Rand hits 3-week low against the dollar before recovering.

JOHANNESBURG (Reuters) - South Africa's rand fell sharply to a 3-week low against the dollar on Friday as investors dumped riskier assets amid debt woes in Dubai before staging a strong recovery on profit-taking in later trade.

The local benchmark stock index ended weaker, hitting a two-week low, with gold shares the top losers.

The Johannesburg Top-40 index lost 0.84 percent to 24,271.03 points, while the broader All-Share index slipped 0.8 percent to 26,808.74 points.

At 1539 GMT the rand traded 1.12 percent firmer at 7.4111 against the dollar compared to Thursday's close at 7.4950.

The local currency had stumbled 2 percent to 7.6450 earlier on Friday, its weakest level since November 5, tracking a slump in global markets as concerns over Dubai's debt crisis prompted a sell-off amongst investors.

"Once European bourses showed some signs of stabilisation the sellers came back in dollar/rand," said Nicholas Kennedy, an emerging markets analyst at 4cast.

"The local unit still looks vulnerable to dollar swings though and we'd expect more volatility near-term," he added.

The JSE gold index shed 1.89 percent as investors' fears of a possible Dubai debt default sent bullion down nearly 5 percent to a one week low.

Gold Fields dropped 3.23 percent to 107.99 rand followed by Harmony Gold, which slid 2.96 percent to 81.50 rand.

Petrochemicals giant Sasol fell 2.36 percent to 290 rand as the oil price dropped more than 3 percent to about $74.

South African insurer Liberty Holdings also dipped 2.32 percent to 67.50 rand after showing profitability in the third quarter, which lagged its peers.

"What is driving us down is the possibility of loan defaults in Dubai,", said Rigardt Maartens, a portfolio manager at PSG Online Securities.

But Lonmin and Anglo Platinum rose 1.54 percent to 218.31 rand and 0.47 percent to 750 rand.

Standard Bank , Africa's biggest bank by assets gained 1.26 percent to 96.80 rand.

Government bonds were firmer after Thurday's heavy sell-off pushing yields down, with the 2015 note dipping 3.5 basis points to 8.465 percent while that for the 2036 bond was down 6.5 basis points to 8.97 percent.

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3 week low ? What about the 1 year high ? The rand is the best performing currency of late out...lolololol by Dave on November 29 2009, 20:11 Find this comment inappropriate? Report it

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